United States hits South Africa with 30% tariffs

US President Donald Trump has announced a global 10% tariff on all imports, and higher rates for a slew of ‘worst offenders’, including South Africa.

At a briefing on Wednesday (2 April), Trump said that the United States would implement the long-talked-about reciprocal tariff structure to balance trade and put America first.

He said that countries around the world were exploiting trade with the United States and “cheating” by running massive surpluses while imposing steep tariffs and ‘hidden’ tariffs through VAT and other measures.

During the briefing, the US leader pulled out a chart showing the new tariffs that will be imposed on a long list of countries, including China, the EU, India, Japan, and South Korea.

These countries were dubbed the “worst offenders”. Notably, South Africa is listed among these countries.

While the US president initially discussed fully reciprocal tariffs before the announcement, he said the United States would be kind and implement “discounted” rates.

For example, while Trump claims China is imposing tariffs of 67% on the US, the US would charge a “discounted” rate of only 34%.

For South Africa, Trump claimed that the tariffs on the United States amounted to 60%. In turn, it will implement a “discounted” 30% tariff on the country.

“A lot of bad things are happening in South Africa,” Trump said. “We send them billions of dollars but we had to cut their funding because bad things are happening.”

Trump said that if any country wanted to be exempt from the tariffs, it would simply have to move its production to the United States.

The president also announced a global 25% tariff on all imported vehicles, which will take effect from midnight in the United States.

The reciprocal tariffs will go into effect on 9 April, with the 10% tariff kicking in earlier on 5 April.

Repairing the relationship with the United States

Repairing the fractured relationship between South Africa and the US hinges on balanced trade, according to business and labour leaders from the continent’s biggest economy who met with American politicians in Washington. 

That would mean narrowing South Africa’s trade surplus with the US of more than $4 billion, mainly from its exports of cars and agricultural products, said Johann Kotze, chief executive officer of the country’s biggest farm lobby.

Inclusion in the African Growth and Opportunity Act (AGOA)— which allows duty-free access for many goods into the world’s largest market — may end, he said.

“There was a sense that it’s freebie and there’s not something back for America,” Kotze, the head of AgriSA, said of the perception of Agoa by US senators and members of Congress that the group met. “Reciprocal trade is for America a big thing.”

Kotze declined to identify which US politicians the group met, other than to say they were from both the Republican and Democratic parties.

A political spat has complicated South Africa’s $23 billion trade relationship with the US, its biggest commercial partner after China.

Trump has accused South Africa of seizing privately owned land from Whites, even though the government hasn’t confiscated any since apartheid ended in 1994. He has offered members of the Afrikaner ethnic minority refugee status.

The US leader also cancelled aid to South Africa, crippling programs key to the fight against HIV/AIDS and expelled its ambassador to Washington after he described Trump and his supporters as a “supremacist” movement. 

“We wanted to go to the US for a temperature check to see what the points of irritation are” and whether there is a chance of a reset, said Matthew Parks, the parliamentary coordinator for the Congress of South African Trade Unions and a member of the group that travelled to the US. “We need to address the political turbulence.”

The group intends to brief the government about the talks, Parks said. 

Other members of the group included Neal Froneman, the chief executive officer of precious-metals miner Sibanye Stillwater Ltd., and Adrian Enthoven, the chairman of Hollard Insurance Ltd.

The US could either extend, change or scrap the AGOA agreement — which benefits many African countries — when it expires in September.

“The top administration is very protective regarding its own economy,” Kotze said of the US. “Trade is a big tool for them.”

South Africa could possibly address US trade concerns by encouraging purchases of more American agricultural technology and equipment, he said. It could also enable more US access to its critical minerals, he added. 

South Africa’s Department of International Relations and Cooperation on Tuesday said its director general led a separate delegation that met with US officials. President Cyril Ramaphosa has previously said he is considering sending envoys to the US to try to improve ties.

With Bloomberg